It doesn’t look good for Ethereum. At least that’s what one crypto strategist says. And according to him, it’s going to get far worse before it gets better… if it does.
Crypto analyst Justin Bennett tells his 110,700 Twitter followers that leading smart contract platform Ethereum appears to be setting up for an even deeper plunge after losing nearly 15% of its value in the last 24 hours.
According to the analyst, he sees Ethereum mirroring its 2018 bear market price action where ETH lost about 94% of its value after nosediving from that year’s high of about $1,440 to a low of $86.
“Reminder: The ETH bottom is probably closer to $300 than $1,000.
The only thing that has changed is Ethereum being one step closer to its macro bottom.
Just my opinion, as always.
It would literally be a repeat of the last bear market, yet many claim it ‘can’t’ happen. Why not? Why would ETH retrace less this crypto bear market when it’s the FIRST bear market for crypto where the Fed isn’t printing? Think about it.”
Looking at the analyst’s chart, it appears that he’s calling for ETH to fall to as low as $357 by early 2023. A move toward that target suggests a downside potential of around 73% for Ethereum.
As for Bitcoin (BTC), Bennett highlights that the bottom is not yet in for the king crypto even after it recorded a new 2022 low of $17,579.
“Terrible look for BTC at the moment.
Same channel I’ve posted for months: $18,900 is key right now, as is $18,300.
Although I played the long side here and there, I’ve never wavered on the idea that the bottom is NOT in, and I stand by that.”
At time of writing, Bitcoin is changing hands for $18,605, down nearly 10% on the day.
Why What Happens to Ethereum is Important
Ethereum is the most well-known altcoin, and it’s much more than just another cryptocurrency for many investors and enthusiasts alike. And despite its rough first half of the year, experts predict it could still get back above $4,000 in 2022.
Ethereum’s native token, ether (ETH), has grown immensely in value since its creation in 2015. Launched by computer programmer Vitalik Buterin, ether has increased in price from $0.311 at its 2015 launch to around $4,800 at its highest late last year — with plenty of volatility along the way.
A differentiating feature for ethereum — unlike bitcoin and other cryptocurrencies — is its utility as a software network that allows developers to build and power new tools, apps, and NFTs. The blockchain-based software network has many uses and applications across the tech world, especially for gaming, music, entertainment, and decentralized finance (DeFi) — making it one of the most popular and widely-used cryptos this past year.
Ethereum’s price plummeted Wednesday following the announcement that major crypto exchange Binance is acquiring rival FTX. Ethereum’s price is now in the $1,100 range, a price point not seen since crypto crashed over the summer. The token has lost more than 70% of its value since its all time high in November 2021.
Despite low prices, ethereum (and bitcoin for that matter) held surprisingly steady in October. This is remarkable because that stability came at a time when foreign currencies and the stock market have tumbled. Experts think this could indicate that long-term investors remain undaunted by poor economic news.
Some investors are wondering whether stable crypto prices in the face of poor stock performance indicate that crypto will stop tracking the stock market soon. Experts don’t think the correlation has faded yet, though it has loosened. Experts anticipate that crypto will need more time before it completely breaks free from tracking the stock market.
Where prices are headed, though, is anyone’s guess; potential catalysts for increased volatility towards the end of the year include inflation reports, Fed meetings, the strength of the U.S. dollar and the midterm elections.
Despite recent shortcomings, ether’s ROI is still nearly 300% at an annualized rate. That means early investors have nearly quadrupled their investment every year since the summer of 2014. Crypto prices are notoriously volatile, however, so financial experts say to only invest what you can afford to lose, and never at the expense of foundational goals like emergency savings and high-interest debt payoff.
|ONE WEEK AGO (NOVEMBER 2)||ONE MONTH AGO (OCTOBER 10)||3 MONTHS AGO (AUGUST 11)|
Prices updated: November 9, 2022
So how high do experts expect ether’s price to climb? Here’s a look at the factors contributing to ethereum’s volatile, yet upward-climbing, price projections, and what experts predict for the rest of this year.
Ethereum Price Prediction for 2022: Between $500 and $4,500
We asked several experts their ethereum price forecasts, and the general consensus is ETH could once again break $4,000 in 2022. And a recent ethereum price prediction by Bloomberg intelligence analyst Mike McGlone has it ending the year between $4,000-$4,500.
Now would be a good time to note that each expert we spoke with qualified their ethereum forecasts by saying it is nearly impossible to predict with certainty. The crypto news outlet Coinpedia predicted ETH could end 2022 between $6,500 and $7,500 if the same bullish upswing that started in mid 2021 were to continue. However, 2022 brought a bearish downturn in the crypto market, making it clear that ethereum’s price is not going to rise from sentiment alone. Indeed, Coinpedia has since adjusted its prediction for 2022 to $2,500.
Ether could be in for another big crash this year, with its price dropping to as low as $500. Crypto market analyst Wendy O expects ETH to drop as much as 85% from its all-time high of $4,800, which would lead it to around $750. Venture capitalist Kavita Gupta says ETH could fall as low as $500 if the broader market sell-off deepens.
Some experts have said ETH’s price will be even more volatile than bitcoin in the near future, mainly thanks to ethereum’s transition to a less energy-intensive version that insiders colloquially refer to as “The Merge.” Ethereum’s upgrade could make it more appealing and sustainable for widespread use, but until that happens, experts are waiting to see how investors and companies building their tech on ethereum’s platform respond to the changes.
Whatever happens in the near future, investors will need to see improved demand and functionality for ether’s price to continue rising in the long-term. The blockchain now has considerable competition from similar platforms that are filling in its gaps while the ethereum team works to transition to its second-generation updates.
“Ethereum was the only show in town,” said Henri Arslanian, global crypto leader of the professional services firm PwC in an early 2022 episode of CoinDesk’s First Mover.
Financial planners suggest only investing 1% to 5% of your overall portfolio in crypto. Despite its booming popularity, the crypto market is extremely volatile and prices can fluctuate rapidly overnight.
Ethereum Price Prediction for 2023: Between $2,400 and $5,000
There are two major factors expected to influence the direction of ether’s price in the next year: the timely rollout of ethereum’s big update in September and evolving investor sentiment on risky assets amid an uncertain economic outlook.
Konstantin Boyko-Romanovsky, CEO and founder of Allnodes, expects ETH to reach $5,000 following the upgrade. Coinpedia predicts ETH to start 2023 on a bullish note above $3,000 if the network sees a reduction in congestion and gas fees and further adoption following its massive upgrade. If the network struggles to increase adoption following the upgrade or the crypto market remains slumped, ETH could end 2023 at nearly $2,400. According to Coin Price Forecast, ETH could reach $2,600 when 2023 draws to a close.
Ethereum Price Prediction for 2025: Between $5,700 and $10,000
Coinpedia predicts an even higher price of at least $10,000 in 2025 if ethereum’s upcoming transition to proof-of-stake is successful. The new upgrades make ethereum more user-friendly and more affordable for users to mint and develop products, as right now the service fees to use ethereum are notoriously high. It could also allow ethereum to concentrate on new projects, developments, and partnerships to enhance the network.
“I believe ethereum can go to $8,000,” Ian Balina, investor and founder of crypto research and media company Token Metrics, told NextAdvisor. “Ethereum is the clear leader but other blockchains are onboarding new users at a faster pace due to ethereum’s high gas fees and low transaction speed.”
A 53-expert panel reported by Finder calls for ethereum’s price to reach at least $5,700 by the end of 2025. Meanwhile crypto exchange Changelly expects it to hit at least $6,000 by the end of 2025.
Ethereum Price Prediction 2030: A $15,000 Upside
The Finder panel predicts on average that ETH would be worth more than $14,000 by 2030, though another forecast is less bullish.
Ben Ritchie, managing director of Digital Capital Management, says ETH could reach as high as $15,000 in 2030 because of the upcoming upgrades, such as lower gas fees and scalability. He says ethereum’s price is very much linked to the success of the upgrade and it could possibly outperform bitcoin in the medium to long term.
Ethereum Price Prediction Highs and Lows
The only thing guaranteed when it comes to crypto investing is volatility, so investors should expect more of it in the next few years. Nearly one year ago, ethereum’s price swung as high as $4,800 and now it’s back down below $2,000. This is how high or low ethereum’s price could go in the next few years, according to the experts we talked to:
|Year||Potential High||Potential Low|
What Influences Ethereum’s Price
Ethereum earned its reputation as the first blockchain to use smart contracts, which are basically coded instructions on the blockchain that execute financial transactions through algorithms.
Now new Ethereum alternatives with similar capabilities are hitting the market and changing the demand for ETH in both favorable and unfavorable ways. Here are a few variables that impact ethereum’s price.
High Traffic and Utilization
Smart contracts made it possible for artists and creators to mint (make) and sell the digital artwork now known as non-fungible tokens (NFTs). That was both a blessing and a curse for ethereum, as the blockchain’s popularity led to what some call a “bottleneck” on the blockchain. Think of the mall parking lot on Black Friday — only digitally.
Now, with so many users, it’s become increasingly expensive to transact on ethereum. The ethereum team in response has developed new upgrades to its infrastructure, but it’s taken a few years to develop the technology.
In the meantime, a number of new companies have created add-on solutions (known as “Layer 2s”) that operate on the existing ethereum blockchain. Additionally, entirely new blockchain networks, (known as “Layer 1s”) have also been released as and marketed as potential ethereum alternatives, driving traffic away from the ethereum blockchain and adding new competition — which can both increase or dampen any product’s popularity in the market.
For investors, more people using the ethereum network means more support for the value of your investment, so competitors pulling users away could hinder ethereum’s value over time.
First Mover Advantage
Despite the new competition, experts often suggest ethereum’s “first mover advantage” has positioned it for long-term success, even though newer and more environmentally-friendly technologies have been developed. However, because cryptocurrencies are only valuable due to community buy-in, the commitment of users is more important than being first.
Thankfully, ethereum has both: “I think the first mover advantage is real,” says John Zannos, a partner at Inflection VC, an early-stage venture firm investing in the open economy and blockchain companies. “But what’s more important to me is the health and the size of the community, and how many developers are coming into that community, because that’s what’s going to drive innovation.”
New blockchains like solana and cardano also provide similar functionality to ethereum and have their own native cryptocurrencies. Still, experts say ethereum is well positioned to grow with its users and meet evolving demand in the future.
“Ethereum could rapidly expand capacity if it wanted to,” says Raza Khan, an investor in the fintech industry and founder of the blockchain platform, Be. And for now, it seems the ethereum community is OK with waiting to see if it does.
Competition From ‘Ethereum-Killers’
If “cryptocurrency” and “NFT” became household terms in 2021, “Web3” could make a run of it for 2022. Web3 refers to an open-access version of the internet built on blockchain technology, where financial transactions are more transparent, individuals have more ownership over their data, and, through cryptocurrency, users own most of the infrastructure.
Companies like ethereum and similar blockchains like Solana, cardano, and tezos are working to develop the infrastructure on which the future vision of Web3 can be built. Investors see these new developments as similar to the dot com boom when Google, Facebook, and Apple were first coming into public awareness.
“2022 will be the battle for Web 3 and the next evolution of the internet,” says Balina.
The Future of Ethereum
Despite ethereum’s competition, and other factors contributing to its ongoing volatility, there’s a general sense of optimism that the original smart contract blockchain will make it through this era of trials.
“Ethereum has over 90% of the NFT market,” said Arslanian. “This is going to be a very important year for ethereum, a kind of a make-or-break year.”
There is good reason to expect a quick rebound from the current slump ethereum is experiencing, Zannos tells NextAdvisor. “What I think ethereum has is that momentum of community that allows for a group of very smart people to create innovation and see new opportunities,” Zannos says. “At the core, my optimism is tied to just the versatility of what you can do with ethereum.”
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